Figure in Heath investment scheme dies in prison

07:09 PM PDT on Monday, September 22, 2008

By LOU HIRSH
The Press-Enterprise

Special Section: D.W. Heath & Associates Trial

Case attorneys and a relative have confirmed that John W. Heath, 81, one of three men convicted in a $190 million investment fraud scheme, has died of cancer. Heath was diagnosed with terminal bone cancer last year and died in August.

A judge Monday finalized a Friday sentencing date for his son, Daniel W. Heath, 51, the key figure in the case. Heath's sentencing, which has been delayed several times, is scheduled for 8:30 a.m. in the Riverside Historic Courthouse.

Riverside County Deputy District Attorney Michael Silverman said Courtroom 1 has the largest capacity to handle a sizable audience, as well as the former Heath investors expected to speak at the sentencing. The case was moved from Corona after trial Judge Ronald Taylor was transferred to Riverside earlier this year.

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John W. Heath

The younger Heath was convicted in January on 400 criminal counts and faces up to 127 years in prison.

John Heath's grandson, Aaron Heath, of Phoenix, who is Daniel Heath's son, left a phone message during the weekend saying his grandfather died a few weeks ago in a Northern California prison where he had been transferred after sentencing.

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Daniel W. Heath

Prosecutors and two other attorneys associated with the Heath case said Monday they were informed the elder Heath had died in August.

The elder Heath was sentenced in February to 28 years in prison after his conviction on 52 counts.

D.W. Heath & Associates, whose president was the younger Heath, promised nearly 1,600 investors, mostly elderly retirees, a high return on what were sold as safe securities. But in reality the bulk were failing real estate and business start-up projects in which Daniel Heath had a controlling interest. In the end, investors were able to retrieve through a court receiver about 22 cents on each dollar invested.

Heath business associate Denis T. O'Brien was found guilty on 70 counts and sentenced to 40 years in prison.